Job work inputs excluded from assessable value where binding precedent settled valuation against inclusion.

Inputs received under job work challans and fitted into the final product were held not includible in the assessable value for central excise duty, because the duty liability on the final product was not shown to have been avoided on the footing that the inputs were received otherwise than for job work. The valuation issue was treated as settled against inclusion by binding precedent directly covering the point, so the demand and penalties were not sustainable. The appeal succeeded and the impugned order was set aside.

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Issues: Whether the value of inputs received under job work challans and fitted into the final product was required to be included in the assessable value for central excise duty.

Analysis: The inputs were received under job work challans and were admittedly fitted into the final product manufactured by the appellant. The duty liability on the final product cleared from the appellant's premises was not shown to have been avoided on the basis that the inputs were received otherwise than for job work. The issue of duty on such inputs supplied for use in the final product stood settled in favour of the assessee by the cited binding precedent, which directly covered the point.

Conclusion: The inclusion of the value of the inputs in the assessable value was not warranted, and the demand and penalties could not be sustained.

Final Conclusion: The appeal succeeded and the impugned order was set aside.

Ratio Decidendi: Where inputs are received under job work challans and are used in the manufacture of the final product, their value cannot be included in the assessable value when the applicable law on valuation has already been settled in favour of the assessee by binding precedent.

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